Blockbuster loss wider than expected, shares drop

By IBT Staff Reporter On 11/12/09 AT 4:56 PM

Blockbuster Inc , the largest U.S. movie rental chain, posted a larger-than-expected third-quarter loss it said was due primarily to write-offs of debt financing costs and the sale of its Irish unit, and its shares plummeted 12 percent.

Blockbuster's net loss was $116.8 million, or 60 cents per share, for the third quarter ending October 4, compared with a loss of $17.8 million, or 9 cents per share, in last year's third quarter, the company said on Thursday.

Excluding items, Blockbuster's loss of 25 cents per share was more than double the Wall Street average forecast for a loss of 11 cents per share, according to Thomson Reuters I/B/E/S.

Third-quarter revenue fell about 24 percent to $910.5 million from $1.2 billion a year earlier. That was below analysts' average forecast of revenue of $1.01 billion, according to Thomson Reuters I/B/E/S.

There's no way to sugarcoat this. The business is challenged, said Edward Woo, an analyst with Wedbush Morgan.

Honestly they need to give visibility ... They need to prove that the first three quarters of this year were an anomaly and they can turn things around.

He noted the 14.4 decline in same-store sales was double what he was expecting.

Blockbuster is trying to ramp up its stores, kiosks, digital and by-mail offerings to compete against fast-growing rivals like kiosk provider Coinstar Inc's Redbox and Internet rental site Netflix .

Shares of Blockbuster fell 10 cents to 73 cents after closing at 83 cents on the New York Stock Exchange.